The cost of insuring a used vehicle is typically lower than insuring a new one because the replacement value and repair costs are usually less. New cars may require higher coverage limits and additional options like gap insurance, which can increase premiums.
However, discounts for safety features on newer models can sometimes offset the higher cost of car insurance. Keep reading to learn more about car insurance by vehicle type for new and used cars.
- Unless you insure an exotic, luxury or classic car, a used vehicle will almost always be less expensive to insure than a new vehicle of the same model.
- Premiums are calculated the same way regardless of whether the car is new or used, but new cars have higher replacement and repair costs, pushing up the cost of insurance.
- Vans are the cheapest vehicle type to insure.
How premiums are calculated for new vs. used cars
Insurers use the same process to calculate a premium for new and used cars, and many factors are considered when calculating a rate. While a used car of the same make and model will usually be cheaper to insure than a new one, there are situations where the new vehicle may be the cheaper option.
Insurance companies will consider these factors and more:
- Age
- Marital status
- Driving history
- Location
- Vehicle type
- Credit/insurance score
Insurers rate risk differently using a proprietary algorithm, which can result in dramatically different premium quotes, so the best advice is to shop your coverage with numerous insurers, research specific vehicles and then compare all of your options.
Average insurance premiums for new vs. used vehicles
In all the scenarios we ran, a new car is more expensive to insure than a used one, and, in some cases, the difference was dramatic. New cars are more costly to replace and repair, so they are almost always (classics and exotics being the exception) more expensive to insure than a used vehicle.
We ran the numbers and found that an Allstate-insured 2023 ($3,549) vehicle was 65% more expensive than a 2014 ($2,148) model of the same vehicle. When comparing a 2023 to 2020 model, the newer model is only 24% more expensive. The numbers clearly show that insuring a new vehicle can be significantly more expensive than insuring a used one.
The data also show the differences between insurance company premiums. There was a 65% difference between the most expensive premium for our 2023 vehicle and the least expensive rate for the same car.
See the rates we found for various insurance companies in the table below.
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $2,148 | $2,466 | $2,854 | $3,549 |
| Farmers | $2,098 | $2,460 | $2,748 | $3,098 |
| Geico | $1,577 | $1,766 | $1,965 | $2,264 |
| Nationwide | $1,872 | $2,040 | $2,214 | $2,152 |
| Progressive | $1,811 | $2,014 | $2,256 | $2,466 |
| State Farm | $1,573 | $1,767 | $1,939 | $2,148 |
Check out our guide on how to insure a new car
Comparison of insurance rates for popular car models
The make and model you drive will also impact your rates, with some vehicle types being much more expensive to insure. In most cases, sports, electric and luxury vehicles will fall on the expensive side for insurance, while more family-friendly vehicles such as sedans, SUVs and minivans are more affordable.
We examined a few models to see where they fell on the premium ladder. The most expensive vehicle to insure was the Tesla Y, regardless of which year we examined. In fact, it was 38% more expensive than the second most expensive vehicle to insure, a Ram 1500.
See the rates for a Ford F-150 and Chevrolet Silverado by vehicle year in the table below.
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $1,964 | $2,261 | $2,597 | $3,279 |
| Farmers | $1,899 | $2,275 | $2,447 | $2,715 |
| Geico | $1,431 | $1,570 | $1,688 | $1,963 |
| Nationwide | $1,641 | $1,799 | $1,922 | $1,702 |
| Progressive | $1,669 | $1,840 | $2,125 | $2,302 |
| State Farm | $1,382 | $1,618 | $1,822 | $2,051 |
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $2,022 | $2,343 | $2,626 | $3,378 |
| Farmers | $1,989 | $2,275 | $2,513 | $2,777 |
| Geico | $1,531 | $1,708 | $1,849 | $2,080 |
| Nationwide | $1,830 | $2,101 | $2,105 | $2,080 |
| Progressive | $1,704 | $1,981 | $2,126 | $2,310 |
| State Farm | $1,538 | $1,780 | $1,817 | $2,131 |
Electric cars are typically more expensive to insure as they have a massive battery under the hood that is very expensive to repair or replace. They are also loaded with the latest technology, which makes repairs more expensive.
See the rates for a Tesla Model Y by vehicle year in the table below.
| Company | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|
| Allstate | $3,538 | $3,920 | $4,361 | $4,720 |
| Farmers | $4,072 | $4,131 | $4,419 | $4,544 |
| Geico | $3,200 | $2,713 | $3,312 | $3,061 |
| Nationwide | $2,293 | $2,187 | $2,325 | $2,323 |
| Progressive | $3,235 | $3,297 | $3,433 | $3,524 |
| State Farm | $2,379 | $2,274 | $2,483 | $2,660 |
On the cheaper side of things were the Toyota RAV 4 and the Honda CR-V, both of which are family-focused SUVs. These vehicles tend to be driven by parents, who tend to drive slower and safer, resulting in fewer accidents and claims. They are also cheaper to repair, making them a bargain to insure.
See the rates for a Toyota RAV4 and Honda CR-V by vehicle year in the table below.
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $1,875 | $2,149 | $2,351 | $2,718 |
| Farmers | $1,898 | $2,161 | $2,361 | $2,639 |
| Geico | $1,321 | $1,351 | $1,520 | $1,701 |
| Nationwide | $1,794 | $1,850 | $1,965 | $1,938 |
| Progressive | $1,512 | $1,670 | $1,778 | $1,916 |
| State Farm | $1,408 | $1,502 | $1,628 | $1,669 |
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $1,849 | $2,057 | $2,227 | $2,607 |
| Farmers | $1,840 | $2,056 | $2,241 | $2,475 |
| Geico | $1,240 | $1,384 | $1,509 | $1,617 |
| Nationwide | $1,574 | $1,619 | $1,790 | $1,537 |
| Progressive | $1,435 | $1,548 | $1,702 | $1,870 |
| State Farm | $1,314 | $1,397 | $1,498 | $1,705 |
New vs. used vehicles: Car insurance rates by vehicle type
Regarding the cheapest vehicle type to insure, vans were the clear winner, regardless of year. Vans tend to be cheaper to insure because work vans are mainly empty shells in the back, making them cheap to repair. Minivans are often driven by parents who tend to be safer on the road, lowering the number of claims, which keeps premiums low.
On the other end of the spectrum, cars and pickups were the most expensive vehicles to insure. The lowest car premium was $2,608, which is 41% higher than the lowest van rate. SUVs were the second cheapest option, with a premium of $2,041.
Regardless of which type of vehicle you choose, an older version will be cheaper to insure. A 2023 sedan is 78% more expensive to insure than a 2014 model. With SUVs, the difference drops to 36%, and for pickups, the premium difference was only 10% between those model years.
See the rates by vehicle type, year and insurance company in the table below.
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $2,442 | $2,882 | $3,439 | $4,349 |
| Farmers | $2,465 | $2,953 | $3,431 | $4,068 |
| Geico | $1,844 | $2,123 | $2,481 | $2,973 |
| Nationwide | $2,078 | $2,300 | $2,635 | $2,794 |
| Progressive | $1,936 | $2,297 | $2,735 | $3,179 |
| State Farm | $1,732 | $1,995 | $2,298 | $2,608 |
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $2,064 | $2,383 | $2,788 | $3,402 |
| Farmers | $2,016 | $2,369 | $2,712 | $2,996 |
| Geico | $1,507 | $1,701 | $1,955 | $2,192 |
| Nationwide | $1,803 | $1,981 | $2,147 | $2,094 |
| Progressive | $1,625 | $1,871 | $2,158 | $2,326 |
| State Farm | $1,493 | $1,698 | $1,885 | $2,041 |
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $2,142 | $2,427 | $2,848 | $3,565 |
| Farmers | $2,091 | $2,429 | $2,683 | $2,998 |
| Geico | $1,570 | $1,732 | $1,896 | $2,180 |
| Nationwide | $1,871 | $2,002 | $2,187 | $2,061 |
| Progressive | $1,878 | $2,060 | $2,302 | $2,486 |
| State Farm | $1,587 | $1,746 | $1,920 | $2,163 |
| Company | 2014 | 2017 | 2020 | 2023 |
|---|---|---|---|---|
| Allstate | $1,934 | $2,204 | $2,301 | $2,834 |
| Farmers | $1,785 | $2,083 | $2,225 | $2,494 |
| Geico | $1,393 | $1,543 | $1,613 | $1,918 |
| Nationwide | $1,720 | $1,949 | $1,963 | $1,848 |
| Progressive | $1,543 | $1,665 | $1,725 | $1,880 |
| State Farm | $1,411 | $1,655 | $1,708 | $1,956 |
What coverage options should I consider for an old car?
If the vehicle is worth less than $4,000 or is so old that you would replace it instead of repairing it if it was involved in an accident, you probably only need to carry liability coverage. However, this only applies if your vehicle is paid off and you own it.
Liability coverage protects you if you cause an accident and injure another person or their property, but it will not pay to repair or replace your vehicle. You will be responsible for all costs of repair or replacement.
If you want your older vehicle repaired after an accident, you need to carry full coverage insurance, which includes both collision and comprehensive coverage. These coverages will pay to repair or replace your vehicle if it is damaged or destroyed in an accident, stolen, vandalized, flooded, burned in a fire or if you hit an animal.
Is it worth getting a full coverage policy for a used car?
Absolutely, especially if the used car is not old and still worth quite a bit of money or if you’re making payments. In fact, most used cars should be protected with full coverage to cover repairs after an accident.
According to Cox Automotive, the average price of a used car in January 2024 was $25,328, so unless you can easily afford to cover that kind of cost out of pocket, you should be carrying full coverage on your used vehicle. If you took out a loan to purchase your used car, your lender will require full coverage on the vehicle.
Most experts advise carrying only liability coverage once a vehicle is worth less than $4,000 or you would replace it instead of repairing it if it was involved in an accident.
Learn whether full coverage insurance is necessary for your new or used car
Can I get any discounts on insurance for a new car?
Yes, new cars are eligible for almost all of the standard insurance discounts, as well as ones specific to new vehicles. Insurers often offer many discounts, and some of them are based on the vehicle, not the driver. Many insurers offer a new car discount for vehicles under three years old.
Other discounts that are based on the vehicle are:
- Vehicle safety: If your vehicle is loaded with safety features such as anti-lock brakes, airbags, lane departure, autonomous braking or more, your insurer might offer a discount.
- Anti-theft devices: Built-in or third-party anti-theft devices typically result in a discount of 5% to 20% depending on your insurance company.
- Alternative energy: Some insurers offer a small discount for hybrids or EVs, but this is not true for all insurers.
Tips for lowering insurance costs
Regardless of whether you are driving a new or used vehicle, there are ways to lower your car insurance costs. Here are a few general tips to lower your premium, along with some specific tips for new and used vehicles:
- Shop your coverage: Insurers rate risk differently, which can result in dramatic differences in premium quotes on used and new cars. Shop both national and regional insurers, and always check customer service ratings and the financial strength of any insurer you are considering.
- Discounts: Insurers offer plenty of discounts, so make sure you are getting all available discounts applied to your policy. In addition to discounts based on your vehicle, there are also discounts for safe driving, bundling your coverages, being a good student and more.
- Increase your deductible: Insurers will reward you with a lower premium if you up your deductible. Doubling your deductible can result in significant savings, but always choose a deductible you can afford if you have to make a claim on the policy.
- Improve your credit score: Most states allow insurers to consider your credit score when setting a premium, which can have a major impact on your rate. Statistics show that drivers with poor credit scores tend to file more claims, so insurers charge more. If your credit score has improved recently, ask your insurer to rerun your rates or shop for a new insurance company.
For new cars
Most insurers offer a new car discount, which can shave 7% off the premium for vehicles that are three years old or less. When shopping for a new vehicle, consider one that is loaded with advanced safety features such as lane departure, automatic braking and adaptive cruise control.
For used vehicles
When it comes to used vehicles, the biggest money saver is dropping collision and comprehensive and only carrying liability. This is only a good idea if the vehicle is worth less than $4,000 or if you would replace it after an accident instead of repairing it.
Final thoughts
Regardless of whether you are driving a new or used car, you will need car insurance to protect your vehicle and to drive legally. Liability insurance is a necessity regardless of whether your car is used or news, and is required in just about every state.
Adding collision and comprehensive coverage will ensure your vehicle is repaired or replaced if you are involved in an accident. If you are driving a very old used vehicle that is worth less than $4,000, skipping collision and comprehensive often makes sense.
The cost of insurance for both new and used vehicles will vary between insurers and vehicle makes and models. The best advice is to research various vehicle options and to shop your coverage with a variety of insurance companies.
Frequently ask questions
Is it cheaper to insure a used car?
The cost of insurance really depends on the specifics of the vehicle. It will always be cheaper to insure a brand-new base model Kia compared to a two-year-old Ferrari.
Insurers consider the value of a vehicle as well as the repair costs when setting a premium so the higher the sticker price, the higher your premium. Repair costs are also factored in, and a used luxury vehicle will cost more to repair than a standard vehicle due to high-end finishes and high-tech trims.
How does the car’s age affect my insurance rates?
In most cases, unless your vehicle is a classic or exotic car, your insurance costs should drop as a car gets older. Vehicles depreciate quickly, some lose 20% of their value in the first year and then 10-15% each year after.
Insurers consider the cost to replace your vehicle if it is destroyed and as it ages, that cost drops for your insurer and so does your premium as your insurer will not have to pay as much to replace the car.
It should be noted that older vehicles often lack the advanced safety features of new cars so you will likely lose some discounts but in general, insuring an older vehicle is cheaper than a newer one.
New vs. used: How to choose the right vehicle
The right choice will depend on personal factors such as budget, vehicle availability and personal preference.
New cars offer advantages such as the lack of wear and tear that comes with age, resulting in fewer breakdowns and repairs. A new car comes with a warranty and the latest safety and tech. In addition, new cars tend to be easier to finance. One major disadvantage is the price. New cars are often much more expensive than used ones, and, in most cases, your insurance costs will be higher as well.
Used car advantages typically include a lower price, the fact that they have already seen the worst of the depreciation, and your insurance costs will typically be lower.
Consider your needs and budget when deciding, and always get insurance quotes for any vehicle you are considering so there are no surprises when it comes time to purchase a policy.
Resources & Methodology
Source
Cox Automotive. “Used-vehicle supply and average listing price declined in January.” Accessed October 2024.
Methodology
CarInsurance.com commissioned Quadrant Information Services to get auto insurance rates for new and used cars. The data is based on a sample profile of a 40-year-old male driver with a clean driving record and a good insurance score. The rates are for a full coverage policy with limits of 100/300/100 & a $500 deductible.
To evaluate the premiums, we compared 11,24,913,320 insurance quotes from 57 national and regional insurance companies for 4,565 makes and models from 2014 to 2023.
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Laura Longero
Executive Editor
Laura Longero is an insurance expert and Executive Editor at CarInsurance.com, where she specializes in helping consumers navigate the complexities of the financial and insurance industries. She has 15 years of experience educating people about finance and car insurance. Prior to joining CarInsurance.com, she worked as a reporter and editor at the USA Today Network. Her expertise provides readers with practical guidance, helping them make informed choices about their financial and insurance needs.
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John McCormick
Editorial Director
John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.
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Leslie Kasperowicz
Executive Editor
Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.
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Nupur Gambhir
Managing Editor
Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.